EmbeddingGemma 2: an open, lightweight multimodal embedding model
deepmind.google·6d ago
AI Engineering
Hacker News·Jul 27·5 min read
Apple Will 'Watch Everything Burn' When the AI Bubble Bursts
TL;DR
The AI industry faces a potential collapse due to unsustainable economics, with companies like OpenAI and Anthropic struggling to justify their costs. Apple may benefit from this fallout by avoiding heavy investments in AI infrastructure.
✦ Why It Matters
Evaluate your AI service costs and consider alternatives to avoid unsustainable expenses.
Key Takeaways
- Assess the true costs of AI services before committing to subscriptions.
- Monitor the financial health of AI companies you rely on.
- Consider alternatives to AI tools that may not deliver value.
- Stay informed about market shifts in AI infrastructure investments.
Full Summary
Ed Zitron argues that the economics of Large Language Models (LLMs) are fundamentally flawed, as companies often sell subscriptions that do not cover the actual costs of token usage. For instance, OpenAI reportedly lost $20.9 billion in 2025 despite generating $13.07 billion in revenue.
Many AI startups are unprofitable because users are unwilling to pay the true costs associated with AI services. Additionally, the demand for AI data centers is largely driven by a few major players, masking a lack of broader enterprise demand.
As hyperscalers invest heavily in AI infrastructure, consumers are likely to face rising hardware prices, which may not lead to profitable outcomes for these companies. Apple, however, is strategically positioned to watch the situation unfold without significant losses, potentially allowing it to make advantageous acquisitions.